The problem with federal budget policy in the U.S. is that the policy has very little to do with the economics of government budgets. A simple example illustrates this: In the Carter years federal deficits were a hot political topic. We needed to reduce "the deficit" (laughably small by today's standards), however, these federal deficits (16.1 billion) were more than offset by state and local surpluses (26.7 billion)! So the governmental sector was actually 10.6 billion in surplus. This illustrates that the problem continues to be one of perception. Both the public and politicians treat the federal budget as if it were an individual's checking account. Thus a deficit is the equivalent of an overdrawn checking account indicating poor management and possibly fraud. It is this moral response to this inappropriate analogy that drives the political debate and public response (which incidentally is encouraged by many politicians). Consequently economic argument it largely irrelevent on this issue. Bill Waller [EMAIL PROTECTED]
